by Claude Chendjou

PARIS (Reuters) – European stock markets are in decline on Tuesday mid-session for the first session of 2024 and the trend in New York is also cautious after a euphoric end to 2023, marked in particular by nine consecutive weekly gains for the main indices on Wall Street.

New York index futures signal Wall Street opening down 0.46% for the Dow Jones, 0.63% for the Standard & Poor’s 500 and 0.9% for the Nasdaq.

Over the whole of 2023, the Dow Jones jumped 13.7%, the S&P-500 24.2%, the Nasdaq 43.4% and the Russell 2000 small-cap index 15.1%. the good performance of the markets being fueled by the giants of new technologies and the hopes placed in them on artificial intelligence (AI), as well as the prospect of rate cuts from the major central banks this year.

In Paris, the CAC 40, which climbed 16.51% in 2023, lost 0.35% on Tuesday to 7,517.04 points around 12:05 GMT after a positive start to the session. In Frankfurt, the Dax, which jumped 20.3% last year, fell 0.16%. In London, the FTSE, which gained 3.78% in 2023, lost 0.33%.

The pan-European Stoxx 600 index fell by 0.21% after a gain of 12.74% in 2023. The FTSEurofirst 300 lost 0.23% and the EuroStoxx 50 0.35%.

The Stoxx 600, however, reached a 23-month high in the morning, thanks in particular to the energy sector (+0.91%) against a backdrop of tensions in the Red Sea where the attack on a cargo ship by Yemeni Houthi rebels was pushed back by the US Navy on Sunday.

But the positive trend faded with the publication of the PMI manufacturing activity indicators in Europe.

For the eurozone as a whole, manufacturing activity contracted in December for the 18th month in a row, with the index at 44.4 in December after 44.2 in November, suggesting a recession in the fourth quarter.

The PMI index of manufacturing activity in the United States for the month of December will be published at 15:00 GMT.

VALUES IN EUROPE

The logistics groups Maersk (+4.2%), Hapag-Lloyd (+4.15%) and Frontline (+4.33%) are being sought in the prospect of an increase in their freight rates.

The European banking sector (+1.22%) rose to its highest level since May 2018, notably with the Italian group Monte dei Paschi (+4.07%) and the Spanish Sabadell (+2.56%) and BBVA (+1.77%).

In Paris, Société Générale (+2.51%) and BNP Paribas (+0.81%) are also in the green, while Valeo gains 1.76% after the announcement of the appointment of Edouard De Pirey to the position. of financial director.

VALUES TO FOLLOW AT WALL STREET

Apple fell 1.2% in pre-market trading after thefly.com reported that Barclays had lowered its recommendation on the Apple group to “sell”.

The oil groups Chevron, Occidental Petroleum, Marathon Oil and Exxon Mobil advanced around 1% in pre-market trading due to tensions in the Red Sea.

Stocks linked to cryptoassets like Coinbase Global, Bitfarms, Riot Platforms, Marathon Digital, Hut 8 Mining and Bit Digital climb from 6.5% to 16% in pre-market trading while bitcoin trades above $45,000 for the first time since April 2022.

RATE

The yield on the ten-year German Bund climbs more than five basis points, to 2.088% after a fall of 55 points over the whole of 2023, the sharpest drop since 2014.

Eurozone interest rate futures (ESTR) show the European Central Bank (ECB) deposit rate will fall to 2.38% by the end of the year from 4.0% Currently.

In the United States, the yield on ten-year Treasuries increased by 8.8 basis points, to 3.9576%, compared to a peak of more than 5% in October 2023.

Money markets are betting with a probability of 86% on a rate cut by the US Federal Reserve (Fed) as early as March, with a reduction of 150 basis points in total this year.

CHANGES

The dollar rises by 0.56% against a basket of reference currencies for the first session of the year while currency traders await employment figures in the United States and inflation in Europe.

The euro fell 0.69% to $1.0968 as investors digested PMI data.

OIL

Fears of a disruption in oil supplies are supporting the market: Brent rose 2.09% to $78.65 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.08% to 73 .14 ​​dollars.

(Written by Claude Chendjou, edited by Blandine Hénault)

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